Capital Allowances Act 2001 section 508

Basic rule for calculating amount of allowance

Section 508 sets out the basic method for calculating the writing-down allowance available under the assured tenancy allowances regime.

• The writing-down allowance for a chargeable period is 4% of the qualifying expenditure attributable to each qualifying dwelling-house.
• If the chargeable period is longer or shorter than a year, the allowance is proportionately increased or reduced accordingly.
• This basic rule only applies where there has been no sale of the relevant interest — if section 509 applies, a different calculation is used instead.
• The 4% rate means the full qualifying expenditure is written down over a 25-year period, assuming standard-length chargeable periods.